21 Jan 2020

Uber Eats just sold its food delivery at 9.99% stake to Zomato

Frost & Sullivan has reported that Asia is the largest market for online food delivery globally and has secured a $45 billion revenue in 2018 and by the year 2025 it shall surpass $100 billion.

That sounds so promising for any online food delivery portal, but sadly this stat and prediction couldn’t help Uber Eats to survive the competition obstacle.

Ouch! It sounds so surreal, that you may end up rubbing your eyes repeatedly, in the quest of reading the correct news piece.

But hold your breath, because this very info is brilliantly true!

Uber Eats has agreed to sell its services to Zomato, continuing its recent efforts to exit money-losing businesses for $350 million deal.

The acquisition of Uber Eats “significantly strengthens our position” in India’s food delivery wars, Zomato founder and CEO Deepinder Goyal has given the statement.

This acquisition has cracked the huge million dollars deal, but at the same time has left more than 100 employees in the lurch. As Zomato has declared its part that it will not absorb Uber Eat employees, so either they will be hired in other verticals of Uber, or may face lay-off.

What led UberEats to this decision?

Uber Eats witnessed a loss of more than $1 billion in the third quarter of 2019. With a cash burn of $20 million per month in India, Uber Eats could not deliver, what is proposed to.

Since its launch in India in May 2017, it had tried its level best to pace up with the Indian rivals.

However, Uber CEO Dara Khosrowshahi had already hinted the exit last year only, when he said, “Our strategy for Eats is simple: invest aggressively into markets where we’re confident we can establish or defend a No. 1 or No. 2 position over the next 18 months,” and a few days later he added that Uber would “get out” if that was not the case.

However, it was much evident that Uber had been under pressure to grow the profitability scale. Since May last year, investors were concerned about the Uber’s history of constant losses and moderate growth.

Revenue Mystery of Uber Eats

It is reported that Uber Eat’s Indian operation catered only 3% of Uber’s food business revenue globally, and triggered the 25% losses in 2019, making it $500 million a year. Uber is hopeful to curb down the losses and become profitable by 2021, after this deal.

What this deal will mean to Zomato?

It is ubiquitous that Swiggy is scaling higher then Zomato in the food delivery space. But with the on-boarding of Uber Eats, Zomato is likely to get catapulted to heights.

This new deal will capture a 50-55% market in the food delivery business.

Further Zomato’s co-founder and CEO, Deepinder Goyal, has made the official announcement, stating,

Uber gets close to a 10% stake in Zomato, and would certainly be the market leader, with a value of $3 billion.

Further, Zomato is backed by Alibaba affiliate Ant Financial, which has agreed to invest up to $150 million at a pre-money valuation of $3 billion.

Uber CEO  tweeted “Zomato has acquired Uber Eats in India and we’ll no longer be available here with immediate effect. We wish all our users more good times with great food on the road ahead. We’ll be shutting down our page down now. If you have any queries, please feel free to reach out to our customer service.”

On the other hand, if you have any query to get a successful food-delivery app like Zomato, then reach out to our team of experts, and dominate the food market.

For more tech-updates, stay tuned to this space for more information…


Ankit Singh


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